TPG Capital to Invest $135 Million Developer AV Homes

TPG Capital, the private-equity firm founded by David Bonderman and James Coulter, agreed to invest $135 million in AV Homes Inc. (AVHI) and take a more than 40 percent stake in the developer.

TPG will make the investment at $14.65 a share, Scottsdale, Arizona-based AV Homes said today in a statement. The stock closed yesterday at $14.54. At the deal’s completion, AV Homes will issue about 2.6 million common shares and 0.7 million shares of newly created preferred stock, resulting in TPG owning 41.9 percent of the company.

AV Homes today jumped 21 percent to $17.53, the biggest increase since December 2008. The stock had gained 2.3 percent this year through yesterday.

U.S. developers are expanding as the housing market recovers from a more than half-decade slump. AV Homes, which builds communities in Arizona and Florida for people 55 and older, said it will use the proceeds from the investment to accelerate growth in current markets and enter new areas.

AV Homes “is well-positioned to participate in the ongoing recovery of the housing market, with real estate assets located in two healthy and growing Sunbelt markets,” Kelvin Davis, a senior partner at TPG, said in the statement.

TPG, which previously invested in homebuilder Taylor Morrison Home Corp. (TMHC), will have two of eight spots on AV Homes’s board at the deal’s completion. That will increase to four of 10 seats upon shareholder approval, the companies said.

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